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HomeMy WebLinkAbout1996-032 CCR1 1 1 its adoption: Member Debra Hilstrom introduced the following resolution and moved RESOLUTION NO. 96 -32 RESOLUTION PROVIDING FOR THE ISSUANCE AND SALE OF ELDERLY HOUSING REVENUE BONDS, TO PROVIDE FUNDS FOR AN ELDERLY HOUSING PROJECT, ON BEHALF OF THE PRESBYTERIAN HOMES HOUSING AND ASSISTED LIVING. INC. BE IT RESOLVED by the City Council of the City of Brooklyn Center, Minnesota (the "City as follows: 1. Authority. The City is, by the Constitution and laws of the State of Minnesota, including Minnesota Statutes, Chapter 462C, as amended (the "Act authorized to issue and sell its revenue bonds for the purpose of financing the cost of housing developments for the elderly and to enter into agreements necessary or convenient in the exercise of the powers granted by the Act. 2. Authorization of Project: Documents Presented. Presbyterian Homes Housing and Assisted Living, Inc., a Minnesota nonprofit corporation (the "Corporation has proposed to this Council that the City issue and sell its City of Brooklyn Center Elderly Housing Revenue Bonds (The Presbyterian Homes of Minnesota, Inc. Project), Series 1996, in substantially the form set forth in the hereinafter- mentioned Indenture (the "Bonds pursuant to the Act and loan the proceeds thereof to the Corporation, in order to provide financing with respect to costs of the acquisition of an elderly housing development known as Earle Brown Commons consisting of 140 rental units and related facilities located at 6100 Summit Drive North in the City of Brooklyn Center, Minnesota (the "Project Forms of the following documents relating to the Bonds have been submitted to the City: a. Loan Agreement (the "Loan Agreement dated as of February 1, 1996, between the City and the Corporation, whereby the City agrees to make a loan to the Corporation of the gross proceeds of sale of the Bonds and the Corporation agrees to undertake and complete the Project and to pay amounts in repayment of the loan sufficient to provide for the full and prompt payment of the principal of, premium, if any, and interest on the Bonds; and b. Trust Indenture (the "Indenture dated as of February 1, 1996, between the City and American Bank, N.A., as trustee (the "Trustee authorizing the issuance of and pledging certain revenues, including those to be derived from the Loan Agreement, as security for the Bonds, and setting forth proposed recitals, covenants and agreements relating thereto; and c. Combination Mortgage, Security Agreement and Fixture Financing Statement and Assignment of Leases and Rents (the "Mortgage dated as of February 1, 1996, from the Corporation to the Trustee, by which the Corporation grants to the Trustee a mortgage lien on and security interest in certain mortgaged property, as described therein, as further security for 1 1 1 RESOLUTION NO. 96 32 g. the payment of the Bonds and assigns to the Trustee its interests in all leases and rents with respect to the mortgaged property (this document not to be executed by the City); and d. Assignment of Mortgage (the "Assignment dated as of the date of delivery of the Bonds, from the City to the Trustee, by which the City assigns its interest in the Mortgage to the Trustee; and e. Guaranty Agreement (the "Guaranty") dated as of February 1, 1996, from The Presbyterian Homes of Minnesota, Inc., Presbyterian Homes Foundation, Presbyterian Homes Management and Services, Inc., Presbyterian Homes Care Centers, Inc., and Presbyterian Homes of Arden Hills, Inc. (collectively, the "Guarantors to the Trustee (this document not be executed by the City); and f. Regulatory Agreement (the "Regulatory Agreement dated as of February 1, 1996, by and among the City, the Corporation and the Trustee, by which the Corporation has agreed to operate the Project as a "residential rental project" under Section 142(d) of the Internal Revenue Code of 1986, as amended; and Bond Purchase Agreement (the `Bond Purchase Agreement by and between Miller, Johnson Kuehn Incorporated (the "Underwriter"), the Corporation and the City, providing for the purchase of the Bonds from the City by the Underwriter and setting the terms and conditions of purchase; and h. Preliminary Official Statement and form of final Official Statement, the form of the Preliminary Official Statement, together with the insertion of the final underwriting details of the Bonds, including the interest rates thereon, and any other changes deemed necessary or desirable, intended to constitute the form of the final Official Statement, and including all Appendices thereto (together the "Official Statement describing the offering of the Bonds, and certain terms and provisions of the foregoing documents. 3. Findings. It is hereby found, determined and declared that: a. The Project constitutes an elderly residential rental project authorized by and described in the Act. b. There is no litigation pending or, to the best of its knowledge, threatened against the City relating to the Bonds, the Loan Agreement, the Bond 2 1 RESOLUTION NO. 96 -32 Purchase Agreement, the Regulatory Agreement or the Indenture or questioning the due organization of the City, or the powers or authority of the City to issue the Bonds and undertake the transactions contemplated hereby. c. The execution, delivery and performance of the City's obligations under the Bonds, the Indenture, the Bond Purchase Agreement, the Regulatory Agreement and the Loan Agreement do not and will not violate any order of any court or other agency of government of which the City is aware or in which the City is a party, or any indenture, agreement or other instrument to which the City is a party or by which it or any of its property is bound, or be in conflict with, result in a breach of, or constitute (with due notice or lapse of time or both) a default under any such indenture, agreement or other instrument. d. It is desirable that the Bonds be issued by the City upon the terms set forth in the Indenture, under the provisions of which the City's interest in the Loan Agreement will be pledged to the Trustee as security for the payment of principal of, premium, if any, and interest on the Bonds. e. The Loan Agreement provides for payments by the Corporation to the Trustee for the account of the City of such amounts as will be sufficient to pay the principal of, premium, if any, and interest on the Bonds when due. The Loan Agreement obligates the Corporation to pay for all costs of operation and maintenance of the Project Facilities, including adequate insurance, taxes and special assessments. A reserve fund has been established under the provisions of the Indenture in connection with the issuance of the Bonds. f. Under the provisions of the Act, and as provided in the Loan Agreement and Indenture, the Bonds are not to be payable from nor charged upon any funds other than amounts payable pursuant to the Loan Agreement and moneys in the funds and accounts held by the Trustee which are pledged to the payment thereof; the City is not subject to any liability thereon; no owners of the Bonds shall ever have the right to compel the exercise of the taxing power of the City to pay any of the Bonds or the interest thereon, nor to enforce payment thereof against any property of the City; the Bonds shall not constitute a charge, lien or encumbrance, legal or equitable, upon any property of the City (other than the interest of the City in the Loan Repayments to be made by the Corporation under the Loan Agreement); and each Bond issued under the Indenture shall recite that such Bond, including interest thereon, shall not constitute or give rise to a charge 3 1 1 1 RESOLUTION NO. 96_19 against the general credit or taxing powers of the City. 4. Anoroval and Execution of Documents. The forms of Loan Agreement, Indenture, Bond Purchase Agreement, Guaranty, Mortgage, Assignment and Regulatory Agreement, referred to in paragraph 2, are approved. The Loan Agreement, Indenture, Regulatory Agreement and Bond Purchase Agreement shall be executed in the name and on behalf of the City by the Mayor and the City Manager, or executed and attested by other officers of the City, in substantially the form on file, but with all such changes therein, not inconsistent with the Act or other law, as may be approved by the officers executing the same, which approval shall be conclusively evidenced by the execution thereof, and then shall be delivered to the Trustee. Modifications to the forms of Guaranty, Mortgage and Assignment may be made at the discretion of the parties thereto. 5. Anoroval, Execution and Delivery of Bonds. The City shall proceed forthwith to issue the Bonds, in an aggregate principal amount of not to exceed $4,700,000, in the form and upon the terms set forth in the Indenture, which terms are for this purpose incorporated in this resolution and made a part hereof; provided, however, that the initial aggregate principal amount of and the maturities of the Bonds, the interest rates thereon, and any provisions for the optional or mandatory redemption thereof shall all be as set forth in the final form of the Indenture to be approved, executed and delivered by the officers of the City authorized to do so by the provisions of this resolution, which approval shall be conclusively evidenced by such execution and delivery; and provided further that, in no event shall such maturities exceed 30 years or such rates of interest rates of interest produce a net interest cost not to exceed 7.25% per annum. The Underwriter has agreed, pursuant to the provisions of the Bond Purchase Agreement, and subject to the conditions therein set forth, to purchase the Bonds at the purchase price set forth in the Bond Purchase Agreement, and said purchase price is hereby accepted. The Mayor, City Manager and other City officers are authorized and directed to prepare and execute the bonds as prescribed in the Indenture and to deliver them to the Trustee, together with a certified copy of this Resolution and the other documents required by Section 2.02 of the Indenture, for authentication, registration and delivery to the Underwriter. As provided in this Indenture, each Bond shall contain a recital that it is issued pursuant to the Act, and such recital shall be conclusive evidence of the validity and regularity of the issuance thereof. 6. Official Statement. The City hereby approves the form of and consents to the circulation by the Underwriter of the Official Statement in offering the Bonds for sale; provided, however, that the City has not participated in the preparation of the Official Statement or independently verified the information in the Official Statement and takes no responsibility for, and makes no representations or warranties as to the accuracy or completeness of such information. 7. Certificates_ etc. The Mayor, City Manager and other officers of the City are authorized and directed to prepare and furnish to bond counsel and the purchaser of the Bonds, when issued, certified copies of all proceedings and records of the City relating to the Bonds, and such other affidavits and certificates as may be required to show the facts appearing from the books and records in the officers' custody and control or as otherwise known to them; and all such certified 4 1 1 RESOLUTION NO. 96 -32 copies, certificates and affidavits, including any heretofore furnished, shall constitute representations of the City as to the truth of all statements contained therein. 8. Authorization. The City Manager and other officers of the City are authorized and directed to deliver a certified copy of this Bond Resolution to the County Auditor, together with such other information as the County Auditor may require, and obtain the certificate of the County Auditor as to entry of the Bonds on his bond register as and to the extent required by Section 475.63, Minnesota Statutes. 9. Designation of Oualified Tax Exempt Obliaations. In order to qualify the Bonds as "qualified tax exempt obligations" within the meaning of Section 265(b)(3) of the Code, the City hereby makes the following factual statements and representations: a. the Bonds are issued after August 7, 1986; b. the Bonds are not "private activity bonds" as defined in Section 141 of the Code treating "qualified 501(c)(3) bonds" as not being private activity bonds; c. the City hereby designates the Bonds as "qualified tax- exempt obligations" for purposes of Section 265(b)(3) of the Code; d. the reasonably anticipated amount of tax- exempt obligations (other than private activity bonds, treating qualified 501(c)(3) bonds as not being private activity bonds) which will be issued by the City (and all entities treated as one issuer with the City, and all subordinate entities whose obligations are treated as issued by the City) during this calendar year 1996 will not exceed $10,000,000; and e. not more than $10,000,000 of obligations issued by the City during this calendar year 1996 have been designated for purposes of Section 265(b)(3) of the Code. The City shall use its best efforts to comply with any federal procedural requirements which may apply in order to effectuate the designation made by this paragraph. February 12, 1996 Date 5 L 7 221wt.x, L��a4 Mayor 1 1 1 RESOLUTION NO. 96 -32 ATTEST: J, A City Clerk The motion for the adoption of the foregoing resolution was duly seconded by member Kathleen Carmody and upon the vote being taken thereon, the following voted in favor thereof: Myrna Kragness, Debra Hilstrom, and Kathleen Carmody; and the following voted against the same: Kristen Mann, whereupon said resolution was declared duly passed and adopted.